Health care options for young, healthy and broke

For example, a single 26-year-old earning $16,000 might pay $537 toward the annual premium for a mid-level “silver” plan, according to estimates from the Kaiser Family Foundation. The rest of the premium would be covered by a $2,853 tax credit. (Deductibles and co-pays could cost up to an additional $2,083, depending on how much care the person needs.)

A 26-year-old earning $35,000 would pay $3,325 in premiums — $277 a month — for the same plan, after only a $66 tax credit. (And that patient might be on the hook for another $4,167 in out-of-pocket costs.)

A CHEAPER BUT SKIMPY CHOICE

For those under 30 there’s a special option to buy “catastrophic” insurance with the lowest premiums but scant coverage until a deductible of about $6,250 is met. While it may be tempting, caution is advised.

“We really encourage folks to do their homework and look at the details of the plan,” said Smith, who’s organizing efforts to help young people learn about their choices. “It’s not just the premium. You have to look at what’s being covered, what the deductibles are.”

GO BARE?

People who would have to spend more than 8 percent of their income to buy basic insurance are exempt from paying a penalty if they go without.

For others who feel they can’t afford or just don’t want coverage, the penalties start off relatively low in 2014.

Private insurers have yet to set the prices for their 2014 plans, because coverage that will comply with the law is still being developed. The Congressional Budget Office has estimated that premiums for the bare-bones plan, called “bronze” level, might average between $4,500 and $5,000 per year. Family plans might cost $12,500 per year.

Rates for young adults would be lower. Kaiser’s cost calculator gives a ballpark estimate of about $3,400 for an average single 26-year-old who doesn’t get subsidies.

In contrast, the first year’s minimum penalty for an individual is $95; that’s what a worker making $16,000 would pay. A $35,000 earner would owe $255 — not even a tenth of the estimated $3,325 in premiums.

In 2016, the minimum penalty rises to $695 and it’s capped at a little less than 2.5 percent of taxable income. That’s about a $1,600 fine for someone making $75,000 per year.

Even for the wealthiest folks the law says the penalties can never exceed the average cost of a “bronze” plan. But most of those people already have insurance, anyway.

The Internal Revenue Service could withhold the penalties from taxpayers’ refunds if they don’t show proof of insurance. About 4 million people are expected to end up paying the penalties.

“For many young people, this is the first time they’ve had to deal with health insurance and the health care system,” said Smith. “There will be a learning curve.”